BaltCap to launch €50m investment fund for Baltic SMEs

BaltCap is planning to launch a regional
investment fund worth €50 million in cooperation with Kredex and Baltic
pension funds to offer growth capital to SMEs in Estonia, Latvia and Lithuania. The fund is meant for local and Baltic businesses that want to launch
new products and services, expand their operations through purchase and
takeover deals and whose ambition is to grow and become market leaders,
Baltcap said.

The new fund will be created in cooperation with
BaltCap, the European Investment Fund (EIF), Kredex and local pension
funds, which allows pension funds to invest in Baltic companies to
strengthen their equity capital. The planned size of the fund is €50
million.

According to Martin Kõdar, a managing partner at BaltCap,
there are excellent growth opportunities in Estonia, Latvia and
Lithuania in traditional as well as new branches of economy. "The
region's SMEs need investments to retain their competitive ability and
increase productivity," he added. "We see that the demand for growth
capital is still big in Baltic countries."

Kodar noted that equity capital investments in the private sector in
the region amount to 50 percent of the EU average. "With risk capital
investments, the ratio has improved in the past few years thanks to
international investors, but there is still not enough growth capital,"
he said.

EIF: BaltCap a leading fund manager in region

According
to deputy chief executive of EIF Roger Havenith, BaltCap has proven
itself as a leading fund manager in the region and the new fund will
expand the scope even more. He said that the Baltcap Growth Fund being
prepared by Baltcap is the fifth fund that will be brought to the market
with support from EIF in the framework of the Baltic Innovation Fund
initiative, adding that the EIF is happy with BaltCap's positive impact
on the regional capital market.

The creation of the fund will soon
be complete. BaltCap has entered into initial agreements with
institutional investors to attract more than €40 million worth of
assets. Among bigger investors are Swedbank's pension funds and, through
the Baltic Innovation Fund, EIF and Kredex as well.

The
establishment of the fund must be approved by the Estonian Financial
Supervision Authority and the fund must be entered into Estonia's
commercial register. The application to set up the fund has already been
submitted to the Financial Supervision Authority.